Defendants in two fraud cases were charged by the Securities and Exchange Commission Thursday. Barbra Alexander, a local California radio show host, was charged along with two business executives for misappropriating investor funds to finance her radio talk-show, “MoneyDots,” and for personal use. Alexander allegedly used her status as a radio show host on “MoneyDots,” a talk-show for entrepreneurs, to lure investors into giving funds for short-term loans secured by real estate. The money went to APS Funding, a lending firm of which Alexander is also president. APS vice president Michael Swanson of Seaside, Calif. also lured investors to give money. APS secretary and chief financial officer, Beth Piña, handled the firm’s bookkeeping and created and sent monthly check and balance statements to investors. The trio collected $7 million in investments, $2.5 million of which was used for personal expenditure. Alexander appropriated $1.3 million to finance “MoneyDots” and other business ventures undisclosed to investors. She also attained $1.2 million for personal use. The other $900,000 was split between Piña and Swanson. “For the second half of 2008 and all of 2009, while the three partners paid themselves at least $30,000 a month, APS Funding failed to make any legitimate loans,” the SEC complaint said. The SEC further alleges that Alexander, Piña, and Swanson furthered the scheme by sending monthly account statements to investors reflecting fictitious profits and, in classic Ponzi scheme fashion, paying out purported returns that actually came from new investors. Robert Anderson, of Mt. Prospect, Ill., was charged in the U.S. Attorney’s Office for the Northern District of Illinois for perpetrating a Ponzi scheme that resulted in approximately $12 million in lost investments. Robert Anderson told investors that his real estate investment and rehabilitation firm, Rosand Enterprises, would generate returns from 10% to 20%. Instead of investing the $12 million he received from approximately 77 investors in the purchase, construction, rehabilitation and sale of homes, he paid off earlier investors and personal expenses. “Investors were led to believe that their money was being safely invested in Anderson’s real estate ventures,” said Merri Jo Gillette, director of the SEC’s Chicago Regional Office. “In reality,” the SEC filing said, “Anderson operated a Ponzi scheme.” Anderson collected funds from investors between December 2005 and May 2008. According to the SEC complaint, Anderson told investors Rosand Enterprises was generating the returns they were receiving, when in actuality the firm was not making any profit. Anderson allegedly invested $550,000 in a company he did not control. The firm purchased a piece of commercial real estate that was not profitable and lost nearly all the money Anderson invested in it. This business venture was not disclosed to investors. In addition, he used $7.9 million in monthly “interest” and return of principal to investors, and approximately $1.9 million in to invest in other “suspicious offerings,” according to the SEC report. He also misused $632,000 worth of investors dollars to pay Rosand employees, independent contractors and office expenses. Anderson spent $818,000 on his own personal expenses, including $326,000 for credit card payments, $142,000 on tuition, and paid for his daughter’s wedding. The SEC is seeking a permanent injunction and repayment of ill-gotten gains with prejudgment interest, jointly and severally, against Anderson and Rosand and a financial penalty against Anderson. Write to Christine Ricciardi.
Most Popular Articles
The National Association of Realtors board of directors voted 729-70 on Monday to ban the controversial practice of “pocket listings.”
Fannie Mae and Freddie Mac are on the path to exit conservatorship, a step that could come as soon as 2022. Federal Housing Finance Agency Director Mark Calabria is actively preparing the GSEs to exit conservatorship. Now that could come as soon as 2022 or even 2021.